MEXICO CITY/CARACAS, Sept 13 (Reuters) - Venezuela's state
oil company PDVSA on Tuesday proposed a bond swap for $7 billion
in outstanding debt to lower the financial burden on the
cash-strapped company, which is at the center of the OPEC
nation's unraveling socialist economy.

Reducing the hefty maturity payments due by the end of 2017
could help President Nicolas Maduro's government ease chronic
shortages by making more dollars available to import goods
ranging from rice to cancer medicine.

But investors may remain skeptical that the proposal does
not address underlying problems with Venezuela's state-led
socialist economy, such as dysfunctional state-run companies,
rigid price controls and corruption-riddled currency controls.

"We had a peak of debt payments and we're kicking them
forward," said PDVSA President Eulogio Del Pino in comments
broadcast on state television. "We are seeking financial relief
from the payment of these bonds."

Venezuela is reeling under low oil prices and a steady decay
of its economic system. Inflation is in the triple digits, the
economy is in a deep recession, and citizens routinely spend
hours in line search of basic staple products.

Investors for months fretted that Venezuela was on its way
to default, but have become more optimistic in recent weeks on
signs the Maduro government will continue making payments
despite adverse circumstances.

The swap operation offers a new bond maturing in 2020 in
exchange for bonds coming due before 2017, Del Pino said. It
will include amortization payments in 2017, 2018, 2019 and 2020.
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